Exposure Draft of IP Laws Amendment Bill 2017 published

Exposure Draft of IP Laws Amendment Bill 2017 published

On 23 November 2016 IP Australia commenced public consultation in relation to exposure drafts of the Intellectual Property Laws Amendment Bill 2017, and the Intellectual Property Laws Amendment Regulation 2017.

The main highlight of the draft legislation is that IP Australia has not pursued its original proposal to place a cap of one year on extensions of time based on an error or omission, or circumstances beyond the control of the person concerned. Under the previous proposal, any extensions of time for longer than one year would need to satisfy the more onerous “despite due care” standard.

Copies of the exposure drafts, and their explanatory memoranda, can be found on the IP Australia website here.

The Bill contains draft legislation implementing the majority of the proposals set out in a consultation paper published on 20 February 2015, discussed in our article here. The aim of the draft legislation is to improve Australia’s IP system by aligning and streamlining processes for obtaining, maintaining and challenging IP rights, to support small business, and to fix technical problems relating to the regulation of IP attorneys. According to the original consultation paper, IP Australia believed that the package of proposals would provide annual regulatory savings of between $65,000 and $414,000.

The Bill includes amendments to the Patents Act 1990, Trade marks Act 1995, Designs Act 2003, Plant Breeders Rights Act 1994, Copyright Act 1968 and the Olympic Insignia Protection Act 1987, and Regulations under those Acts. Many of the amendments are being proposed to align the terminology used and procedures set out under the various Acts.

Summary of the amendments to the Patents Act 1990 and Patents Regulations 1991

Annuities

Under the current Act it is possible to pay renewal fees for several years in a single payment. It is also possible to pay renewal fees for the full life of a patent. It was therefore not uncommon for pharmaceutical companies to pay renewal fees from the time of grant of a patent term extension up until final expiry in a single lump sum. Under the new provisions it will only be possible to pay renewal fees in the 12 months preceding the anniversary, subject to a six month grace period. Provisions also clarify that if the fee is not paid in the grace period the application or patent will be treated as having lapsed after the anniversary date.

Re-examination

The Bill includes amendments to clarify that during a re-examination of a standard patent or innovation patent multiple examination reports may issue. The time frames for concluding re-examination are set out, such that in most cases re-examination must be completed within six months of the date of the first re-examination report. If the objections in a re-examination report are not overcome and the applicant or patentee requests a hearing, the person requesting re-examination will be given an opportunity to attend the hearing. Under the current provisions, the person requesting re-examination does not take any active part in the re-examination proceedings.

Extensions of time

Under the new provisions it will no longer be possible to obtain an extension of time based on the “despite due care” standard. Extensions of time based on “error or omission” or “circumstances beyond the control of the person concerned” have been retained and no cap has been placed on their duration despite earlier proposals.

There will also be no discretion for the Commissioner to refuse to grant an extension of time if the requirements have been met. A new requirement has been introduced to require extensions of time to be filed within two months of the date the applicant becomes aware of the error or omission, or within two months of the date the circumstances preventing the relevant act from being done within the certain time ceased to exist. It will therefore be important for applicants and patentees to request extensions of time as soon as possible after they become aware that a deadline has been missed.

Extensions of time for less than three months will be automatically accepted and advertised to allow one month for third parties to lodge an objection. No declaration will be needed to support the extension of time request, although the applicant will need to submit a statement justifying the extension. Since it is possible that a short extension will be automatically granted without sufficient justification, the Commissioner has reserved the right to review the allowability of an extension of time at any time after the extension of time is granted.

Extensions of time of greater than three months will require a declaration to justify the extension of time. These applications will be checked and will proceed to allowance if requirements have been met. The allowance will be advertised to allow two months for opposition purposes.

The existing provisions for the protection of third parties who avail themselves of a patented invention during a period where the patent or application is in a state of lapse have been substantially extended. A person who started to exploit, or who took definite steps by way of contract or otherwise to exploit, the invention concerned during the period during which an application has lapsed or a patent has ceased may, at any time after starting or after taking the definite steps, do either or both of the following:

(a) exploit the invention concerned;
(b) dispose of the right to exploit the invention concerned to another person.

Although it is possible to assign this right, it will not be possible to license the right.

Unfortunately there is little explanation of what is meant by the “invention concerned”. However, it is expected that the right will only extend to the form or forms of invention which the third party had started to exploit, or took definite steps by way of contract or otherwise to exploit, during the period of lapse.

Surprisingly, the new provisions for the protection of third parties do not require the third party to have had knowledge of the lapsing of the application or patent before deciding to exploit the invention or take definite steps to exploit it. This is in contrast to the current provisions which require a causal connection between the lapsing and the exploitation. The reasons given in the Explanatory Memorandum for this change are not particularly convincing. In this regard the Explanatory Memorandum makes a blanket statement that the current requirement is too limiting “because it is reasonable to protect any person who began using an invention when no patent was in force”. The Explanatory Memorandum also suggests that “requiring a person to be aware of the patent can penalize those who conduct due diligence searching but failed to identify the patent due to the complexities of the patent system.”

It is difficult to see why it is not reasonable to require persons seeking to exploit an invention to conduct due diligence searching before doing so. If they fail to identify the patent during this search because the patent is in a state of lapse, then there would be a causal connection between the third party’s reliance on those search results with the lapsing of the patent and commencement of the exploitation. If the patent is not found because a search was not done, or the search done was completely inadequate, then it is difficult to see why the third party should get the benefit of this new right.

Written requirements

A number of amendments have been proposed to remove the requirement for IP Australia to notify applicants “in writing”. The terms “notice”, “tell”, “advise” and “inform” have been replaced with “notification” or “notify”, and “send” has been replaced with “give” with the intention that this encompasses the making of information available electronically. All references to the provision of information “in writing” have been removed.

Filing requirements

The Patents Act 1990 is to be amended to allow the Commissioner to determine the means by which documents may be filed, and the means by which fees are to be paid. Provisions are also made to allow a reduction of fees if “preferred” means are utilized. Preferred means for filing documents or paying fees will be determined by a written instrument in the form of a notice in the Official Journal of Patents. The new provisions will have an effect on the way evidence is filed with IP Australia, allowing the Commissioner to reduce or minimize the number of physical documents and objects submitted as evidence in proceedings before the Commissioner.

Official journal

The Bill removes the requirement for the Commissioner to sell copies of complete specifications as these are now available from the website of IP Australia.

Signatures

Signatures of the applicant or agent will no longer be required to reinstate an application as an International application or for requesting that an International application be treated as a standard application. Signatures will also not be required to withdraw an opposition or to authorize another party to file a Patent of Addition.

Computerised decision making

The Commissioner is to be given a new power to specify by a legislative instrument certain decisions, powers and obligations that can be carried out by the use of the computer program. When the Commissioner uses a computer program for this purpose the Commissioner is taken to have made the decision, exercised the power or complied with the obligation. As a safeguard, the Commissioner is empowered to substitute a new decision for a decision made by a computer if the Commissioner believes the decision made by the computer was incorrect. A party adversely affected by a decision made by a computer can appeal to the Administrative Appeals Tribunal.

Address and service of documents

The requirement to provide a correspondence address will be repealed, as this will be specified on the approved form for filing applications.

Examination of standard patent requests in specifications

The Patents Act 1990 will be amended to allow third parties to request examination of an application. Under the current provisions third parties can ask the Commissioner to direct the applicant to request examination. Accordingly, this amendment merely simplifies the procedure for third party examination requests. The examination fee will be shared between the third party and the applicant.

The Patents Act is also to be amended to clarify that a hearing in relation to an examination report must be requested before expiry of the relevant acceptance deadline. Where a hearing has been requested the relevant period for acceptance is currently extended to three months from the date the decision is made in relation to the hearing. The Bill includes an amendment to allow the Commissioner to set a longer period for a hearing in respect to an Innovation patent. It is not clear from the exposure draft why an equivalent amendment has not been made in relation to standard patents.

Requirements for patent documents

The provisions in the Patents Act 1990 dealing with formality requirements for patent applications have been repealed and replaced with provisions requiring patent requests and complete specifications to comply with formality requirements which will be set out in a written instrument in the form of notice in the Official Journal. One of the reasons for this change is to allow for the presence of colour drawings, graphics and photographs in patent specifications.

Unjustified threats of infringement

The Bill includes an amendment to allow a Court to award additional damages against a person for making flagrant unjustified threats of patent infringement.

The Bill includes some proposed amendments to give full effect to provisions introduced by Schedule 4 of the Intellectual Property Laws Amendment Act 2015 which introduced a bilateral arrangement between Australia and New Zealand for the Trans-Tasman Regulation of Patent Attorneys. In particular, provisions have been introduced to allow the Professional Standards Board to publish specified information about individuals or companies registered as Patent or Trade Marks Attorneys.

Prosecutions

The Patents Act 1990 is to be amended to align the time frame to prosecute offences committed by incorporated Patent Attorneys with the five year timeframe to prosecute offences committed by individual attorneys.

If you have any questions or concerns in relation to any of the provisions in the Intellectual Property Laws Amendment Bill 2017 or Intellectual Property Laws Amendment Regulations 2017, please do not hesitate to contact us. If you would like to make submissions in relation to the exposure drafts the deadline for doing so is 22 January 2017.